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At LCollect we believe that knowledge is power. Every month our debt collection blog gives you practical tips, stories and news from around Australia and the world.

debt collector using automated dialer to a user pay consumer phone line

Monday, October 13, 2014 - Posted by Philip Harvey

In the US, the Telephone Consumer Protection Act ("TCPA") does not allow unsolicited calls from people or companies such as debt collection agencies to be made to telephone numbers from automated telephone dialer systems where the consumer pays for inbound telephone calls.

One consumer in the US had his residential telephone line converted to a Voice over Internet Protocol line ("VoIP") whereby he was then charged for inbound telephone calls (on the old connection he was not).

A debt collector contacted the consumer 37 times. The consumer advised the debt collector that he had not given consent to contact him on the number and that he was receiving charges for the calls the collection agency was making. The collector phone a further three times after this notification and request.

The consumer took the debt collector to Court and won, arguing that automated calls placed to users who pay for inbound calls breached the TCPA. The debt collection agency argued they were exempt from the TCPA because the calls were made to a residential line for a commercial purpose under an exemption ("the residential line" provision).

In Australia, our telecommunications are setup differently whereby inbound calls are generally not charged to any device (mobile or fixed line). Whereas in the US, it is typical for mobile phone users and VoIP users to receive charges for inbound telephone calls.

 

This article was sourced from ACA International on 9 October 2014


how the debt collection guidelines deal with emerging technologies and social media asic and accc guide to debt collection

Monday, September 15, 2014 - Posted by Philip Harvey

So just how does the ACCC and ASIC Guide to Debt Collection deal with new emerging ways of contacting debtors such as social media platforms?

In making contact with a debtor Section 1 of the guide to debt collection provides:

(e) If you elect to use emerging technology to attempt to or make contact with the debtor, you should carefully consider the particular channel and its potential audience. It may be acceptable to attempt contact via emerging technology provided:

  • you have a reasonable belief that contact will be with the debtor
  • you have a reasonable belief that the channel is not shared with other parties (for example, a shared work email address or joint social media account).

(f) You should avoid contacting the debtor via a certain channel (whether it is an emerging technology or a more traditional channel of communication) if:

  • the debtor has specifically requested to be contacted through an alternate channel of communication, or
  • the debtor specifically requested that this particular channel not be used.

 

Section 3 of the guide incorporates emerging technologies such as social media into contact;

(a) ‘Contact’ with the debtor or other person is interpreted widely. It includes, but is not limited to,the following:

  • Communications by phone—including circumstances where the recipient (debtor or other person) elects to terminate the call, or where a voice message is left on a recording device, or where a message of any kind is delivered to the recipient (for example, text message).
  • Communications in writing—including all written correspondence (for example, letter, email, text message, fax, social media application or program, instant chat, phone application, or any other similar device).
  • Communications in person—including face-to-face

 

Section 5 of the guide deals with emerging technology and frequency of contact

Telephone and other contacts (including letters, emails, text or telephone messages, social media channels)

 (e) Unnecessary or unreasonable contact by letter, email, SMS, telephone messages (whether left on a voicemail service, an answering machine or with a third party), or by the use of social media channels or other technology must also be avoided.

Example: Contact using social media
If you use social media such as Facebook to contact the debtor, then you must ensure such contact is not excessive and is always for a reasonable purpose; otherwise the contact may amount to undue harassment. You must also observe your privacy obligations when using such forums to make contact with the debtor.

 

Section 8 of the guide deals with privacy;

(f) Caution should be exercised when leaving messages for the debtor that may be seen or accessed by
third parties, for example....:

  • at no stage should contact be made by a debtor’s social media account that would compromise the debtor’s privacy, for example, placing a message for the debtor in a way that would allow anyone other than the debtor to view it.

 

Section 17 of the guide deals with conduct towards the debtor;

(b) You should never;

  • embarrass or shame a debtor—for example, by sending open correspondence to a shared post-box, posting messages for the debtor in a public online forum (for example, using social media sites), making the debtor’s employer or co-workers aware that the debtor is being pursued for a debt, or creating an impression that the debtor is under surveillance

 

In the glossary to the guide and within the definition of communication;

Communicate: unless otherwise specified, includes communication by telephone, mobile telephone, fax, email, letter, in writing via text message or online technology (such as social media channels), and in person.

 


Debt collection agency refers to debtors as criminals

Tuesday, April 22, 2014 - Posted by Philip Harvey

In the US, Texas, a debt collection agency allegedly, NCA (National Credit Adjusters) referred to several consumers as criminals in correspondence with them.

 

In each case, the debt collection agency (NCA) had purchased or been assigned the debts for collection.

 

In attempting to collect the debts, NCA allegedly made daily phone calls to mobile phones and the debtors workplace, and threatened to take the debtors to court in addition to referring to them as criminals.

 

The debtors are claiming that the Fair Debt Collection Practices Act and Telephone Consumer Protection Act have been breached.

 

In Australia, this type of alleged activity would certainly be against the ACCC and ASIC Guide to Debt Collection, The Competition and Consumer Act and possibly the Privacy Act.

 

This article was sourced from www.setexasrecord.com/news


debt collector harassment with automated phone calls

Thursday, April 03, 2014 - Posted by Philip Harvey

In the US, West Virginia, a debt collection agency is being sued for not stopping phone calls after a man engaged a lawyer.

 

In addition to this, "robotic" phone calls were being made by an automated telephone system that did not empower the person being contacted to talk to a real person. Because of this, he was unable to tell the debt collection company he had retained a lawyer.

 

In the proceedings being brought against the debt collection agency they are claiming;

  • negligence
  • intentional infliction of emotional distress
  • privacy breaches
  • violations of the consumer credit and protection act

 

It would be interesting to see how this case would be handled under Australian Law. There are certainly elements of Privacy and debt collection action that may be against the ACCC and ASIC guide to debt collection.


US Debt collection agency issued civil penalty for harassment

Tuesday, November 19, 2013 - Posted by Philip Harvey

A collection agency, National Attorney Collection Services Inc was pursued by the Federal Trade Commission for harassment. The agency was issuing envelopes where the exterior of the envelope had images of people being "shaken down" held upside down with money falling out of their pockets. The agency was also accused of disclosing debts to third parties including family, friends and work colleagues.

Some of the debts were related to payday loans with very high rates of interest.

The collection agency agreed to pay a civil penalty of US $1m. In addition to this, they were also required to have the consent of the debtor to contact via SMS, and that National Attorney Collection Services must cease all suggestions or references to being a law firm.



Debt collection agency receives largest ever fine for a debt collection agency

Thursday, October 03, 2013 - Posted by Philip Harvey

Expert Global Solutions, the worlds largest debt collection agency was fined US$3.2 million for violation of the Fair Debt Collection Practices Act. In breaching the FDCPA, Expert Global Solutions;

  • Called consumers multiple times each day, in the morning and evening even when consumers requested they cease.
  • Called debtors workplaces even though employers do not allow such calls.
  • Left messages with 3rd parties disclosing the debt. 
  • Continued with collection attempts even when debtors denied owing the debt

In addition to the fine, Expert Global solutions must;

  • not engage is harassment or abuse in debt collection
  • not contact 3rd parties
  • not contact the debtor at their employment where the employer does not allow this
  • cease communications where a person requests no further contact
  • record 75% of their calls and retain the recordings for at least 90 day.

debt collector uses an iron bar in debt collection

Wednesday, August 14, 2013 - Posted by Philip Harvey

In the UK, an unlicensed debt collector used an iron bar on a debtor who refused to make a payment. The collector attended the debtors premises, demanded 3000 pounds from a mechanic who had used the money to purchase work tools. When payment could not be made, he pushed the debtor into his house and then used an 18 inch iron bar and hit the debtor on the body and legs.

The collector was jailed for 12 months for causing actual bodily harm and ordered to pay 500 pounds in compensation and 5,000 pounds in costs.


Unconscionable Conduct in Debt Collection

Wednesday, June 19, 2013 - Posted by Philip Harvey

We reported on this article in April, and have recently had a few questions about unconscionable conduct in debt collection. This is an excellent example of why you can't use a fictitious debt collection company or law firm in an attempt to collect debts.

Excite Mobile Pty Ltd has been found guilty in the Federal Court of acting unconscionably and using undue coercion when attempting to collect debts for mobile phone services. The Federal court also found Excite Mobile Pty Ltd engaged in false, misleading and unconscionable conduct.

Looking specifically at the charges pertaining to unconscionable conduct and debt collection, the Court found;

  • letters that were sent to at least 1000 customers falsely claimed to be from an independent debt collector, and that debts owing to Excite Mobile had been referred for collection where there was no independent debt collector and the letters were sent by Excite Mobile.
  • the telephone number on these debt collection letters was answered by agents of Excite Mobile. In debt collection calls with the debtors, callers were induced or were attempted to be induced into customers paying alleged debts to Excite Mobile.
  • by sending the 1000 letters in the fake debt collectors name, Excite mobile coerced  consumers to obtain payments.
  • false representations were made in these debt collection letters including that courts would order;
  1. customers pay an additional 20% for not paying on time.
  2. repossession of all assets owned by the customers including children's toys.

 

source ACCC v Excite Mobile Pty Ltd [2013] FCA 350


Debtor attempts suicide after Debt Collection Call

Tuesday, June 18, 2013 - Posted by Philip Harvey

This is an extreme example of what not to do when attempting to collect debts. It also highlights the importance of attention to detail in the debt collection process, ensuring your debt is valid, and that your debt collection agency adheres to the law in pursuit of debts.

A case of abusive debt collection has been brought against a creditor (Community Health Center) and its collection agencies (Nationwide Collection Agencies and Receivables Management Partners Holdings) in the Federal Court (Detroit).

 

The Community Health Center believed they were owed money from a debtor who was suffering from multiple sclerosis (MS) and severe depression. However, the outstanding debt should have been paid by Medicare or Worker's Compensation. The hospital and the debt collection agent made "repeated, excessive and threatening" telephone calls in an attempt to collect the mistaken debt.

During one debt collection call, a debt collector told the debtor they would be arrested and "beaten and raped on the way to jail". According to court proceedings, this made the debtor feel so depressed that they attempted suicide by shooting themselves in the face. As a result the debtor is now blind in one eye and cannot speak properly due to damage suffered to the mouth.

Damages (actual, statutory, treble and punitive) are being sought for breaching the Fair Debt Collection Practices Act, the Michigan Collection Practices Act, the Fair Credit Reporting Act.

 Sourced - court house news service -  www.courthousenews.com/2013/04/30/57162.htm (June 2013)


Debt Collection Calls not harassment with debtor using smart phone application

Thursday, June 06, 2013 - Posted by Philip Harvey

A debtor in the US (Detroit) installed an application on their smartphone that automatically ignores telephone calls that the user specifies. The app has the effect that the phone does not ring at the receivers end, and the phone "rings out" at the callers end.

In attempting to collect a debt, a debt collector phoned the debtors mobile some 85 times over a 6 week period.

Subsequently the debtor attempted to sue the Debt Collection Agency for harassment under the Fair Debt Collection, claiming to have suffered from emotional distress.

The Federal Court dismissed the case, with the Judge questioning why it ever made it to the Federal Court, and noted the debt collection calls were being made at a time when money was owed.

We have not come across this smart phone app as yet in our debt collection in Australia, and would be interested to know if anyone in their debt collection efforts has come across this?

US Federal Court Detroit. March 2013.


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